🏢 Corporation tax is paid 9 months and 1 day after the company's accounting year end. Large companies (over £1.5m profit) pay in quarterly instalments.
UK Corporation Tax Rates 2026
Profit Level
Rate
Up to £50,000 (small profits rate)
19%
£50,001 – £250,000 (marginal relief)
19–25% (effective)
Over £250,000 (main rate)
25%
Marginal Relief
Companies with profits between £50,000 and £250,000 qualify for marginal relief, which gradually increases the effective rate from 19% to 25%. The relief is calculated using a specific HMRC formula based on the fraction of profits that fall between the lower and upper limits.
Allowable Deductions
Corporation tax is charged on profits after deducting allowable business expenses. These include salaries, employer pension contributions, office costs, equipment, professional fees, and business loan interest. Capital allowances can be claimed on qualifying assets.
Corporation Tax Payment Deadline
For companies with profits under £1.5m, corporation tax is due 9 months and 1 day after the end of the accounting period. The company tax return (CT600) must be filed within 12 months of the accounting period end.
Frequently Asked Questions
The main rate is 25% for profits over £250,000. Companies with profits up to £50,000 pay the small profits rate of 19%. Profits between £50,000 and £250,000 qualify for marginal relief, which tapers the effective rate between 19% and 25%.
Marginal relief gradually increases your effective Corporation Tax rate from 19% to 25% as profits rise from £50,000 to £250,000, using a standard HMRC formula, so there's no sudden jump at either threshold.
Corporation Tax is normally due 9 months and 1 day after the end of your company's accounting period. Your Company Tax Return (CT600) must be filed within 12 months of the end of the accounting period, even though payment is due earlier.
Yes. The thresholds are divided by the number of associated companies. A group of 4 associated companies would each have thresholds of £12,500 and £62,500 rather than the standard £50,000 and £250,000.
Allowable business expenses (staff costs, rent, equipment, professional fees) reduce taxable profit before Corporation Tax is applied. Capital allowances, including full expensing on qualifying plant and machinery, can also significantly reduce the tax bill.